Could just a small investment in 2010 make you a millionaire today? If yes, which stock should you have invested in?
Investing in stocks can be profitable. But how much really? Could your choice just make the difference in the kind of restaurant you eat? Or could it be a difference from driving a Nissan vs. a Lexus? How much are you missing out by not choosing well?
I can share a personal story. A couple of years ago, I decided to purchase a Tesla stock. I did not have much optimism about buying the stock and at the time Tesla was struggling with many issues on many fronts. But because of Elon Musk’s entrepreneurship record and discussions with some friends, I thought, it might be worth a try. I assigned a small percentage of my portfolio to this foolish idea and started telling people half as a joke that I own some Tesla stock.
My original idea was, hey — maybe they become something big, like the next Ford in many many years in the future and I see a nice profit. If not, it was just a small amount of money. I followed the stock for a while, but stopped looking later. Well, until I was seriously surprised by how much I made. It visibly increased my whole portfolio value.
The only thing I am sorry about again, when I revisit this, is that I did not buy more. I would be in a completely different place now.
The question you might be asking now — were there some other Teslas in the past 10 years? And what can we learn from them? Wouldn’t it be nice to make some real money buying the future Tesla?
To answer what were the other top growing stocks of the past decade, let’s start with this — the 2010 decade was an amazing decade for stocks.
As you can see just these two major indexes more than doubled. This means an average person could have bought one of the indexes and doing nothing would have more than doubled their money.
To look deeper, I took the prices of around 5000 stocks in 2010, or later if they entered the stock exchange during the decade and looked which ones created the biggest percentage return if bought as early as possible and sold around now.
I was a bit surprised not see see Amazon at the top. Unsurprising Tesla is one of the best investments you could have made around 2010 if you held it for full ten years. Which are the other amazing risers?
Here they are:
Tesla’s growth is completely astonishing and unique. To put it into perspective — stories that motivate us to invest in the stock market compare how much money would you have if you bought e.g. coca-cola early in the 20th century and held till today. Well, Tesla’s stock price growth is huge. If you invested just $10,000 around 2010, you would be sitting on around $1.2 million now, just in a single decade!! That is a dream come true.
Let’s have a look at each of the companies briefly. I will write about some of them in more detail in this blog later.
The electric car company. Many people think that the stock price is beyond the financials of the company. But smart growth (e.g. heavy investing in automation), meeting many risky goals and opening a factory in China and Europe is often quoted as the things that got them to the price and valuation they now have.
Company produces software for pharma research, biotech and industry, mainly for modeling biological processes and does related consulting. Many investors like company’s favorable ROCE — return on capital employed and good momentum.
Online movie streaming. Many investors like that they are the early movers that dominated the disrupted industry several years ago. The service is growing and has effective distribution, important are loyal customer fans.
Pizza company run as a tech company. They reinventing their brand, effectively used new technology and grew nicely since their start in 1960.
Patrick Industries, Inc.
Manufacturer of building products and materials to the Manufactured Housing and Recreational Vehicle Industries. Investors like growth of revenue and good financials.
Company produces glucose monitoring systems for diabetes patients. I see this as a tech company, growing rapidly, and delivering great results. Company invested in technology, definitely have great margins if you look at the financials.
Intelligent Systems Corporation
Providing technology solutions and processing services to the financial technology and services market. Looking at the data, it seemed to me that stock increase correlated with buyback activity. Buybacks are a classic way to increase stock price, if done in correct way for an undervalued stock.
A growing business in photonics, vision and precision motion. Used also in medical and advanced industrial technology.
MarketAxess Holdings Inc.
Growing platform for fixed income securities, strong growth fundamentals.
Repligen is a leader in niche markets such as pre-packed chromatography and filtration, higher than average cashflow growth.
Growing, popular e-commerce solution. High number of merchants started moving to online even before covid-19. Has potential for future expansion and is working on things like automated fulfillment centers for its users — merchants and common product search app, similar idea as Amazon’s everything store.
Market leader in its category, commentators claim it has penetrated just a small part of online insurance market and has ample space to grow.
In my view a growing revenue, balance sheet with a reasonable amount of debt, growing free cash-flow, often very strong following of user fans. These are some of the common things behind these fast rising companies.
In bullandbearlist.com we build tools for regular people to search for high potential companies. Please note that all investments entail risk and these are just my opinions, not a professional financial advice. I am not a professional financial advisor. I may or may not hold positions in mentioned companies.